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Mike maples ventureshift 7 17-13

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Mike Maples of Floodgate at Venture shift 2013

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Mike maples ventureshift 7 17-13

  1. 1. Mike Maples, Jr (@m2jr) July 8, 2013
  2. 2. Thunder Lizards
  3. 3. Why aren’t more people trying to build Thunderlizards? Why aren’t more seed funds focused on finding them?
  4. 4. Exponential Entrepreneurship
  5. 5. Part 1: Two Basic Laws…
  6. 6. Law #1: Moore’s Law Computing Performance doubles at the same price every 18 months
  7. 7. Moore’s Law: What It Means • Animates the “magic” of the tech industry • Asymmetric weapon of the startup
  8. 8. Moore’s Law and Exponential Companies PC Client/ Server Internet Social Networking PC Client/S erver Internet Social Networking
  9. 9. Law #2: The Power Law The biggest outcome is bigger than all of the others combined, and so on…
  10. 10. The Power Law in Practice • 10,000-20,000 companies will be funded by Angels • 1,000-2,000 will get VC funding • 50-100 “won’t suck” (exit > $50M) • 10 +/- 5 will be special (exit > $500M) • The best company in a given year will usually be more valuable than all other 9,999 companies combined
  11. 11. The Power Law: What It Means Outcomes do not follow a “normal” distribution …they are governed by exceptionalism •Maples Angel •Maples Fund I •Y Combinator •Exits in a given year
  12. 12. Merging the laws Can I use the asymmetric power of Moore’s Law to create one one of the ten best companies of the year?
  13. 13. Part 2: Exponential reasoning vs linear reasoning
  14. 14. We are hardwired to think linearly • Linear thinking is intuitive • Exponential thinking is not
  15. 15. Exponential Reasoning E=mc2 Intuitive Reasoning F=ma Intuitive, tangible Counterintuitive, abstract Observable Experiment Thought Experiment
  16. 16. Exponential Entrepreneurs and First Principles • Reasoning by analogy – Copy what others do, but with slight variations – Characteristic of linear thinking – Gets us through the day – Start with a tangible idea • Reasoning by first principles – Boil things down to their fundamental truths and reason up from there – Used to figure out things that are counter-intuitive, like quantum mechanics – Start with a thought experiment – Key is to solicit negative feedback relative to the first principles
  17. 17. Reasoning by Analogy: Example 1 “Case method” of analysis (aka “pattern matching”)
  18. 18. Reasoning by Analogy: Example 2 Lean Startup / Customer Development “Religion”
  19. 19. Reasoning by Analogy: Example 3 Companies by analogy (ex “we are Instagram for Google Glass.”)
  20. 20. First Principles Reasoning: Bill Gates Computers have always been expensive …but someday they will be cheap …which means software will become the valuable resource
  21. 21. Diagnostic Test #1 “Most people believe in X. But the truth is NOT X.”
  22. 22. First Principles Reasoning: Evan Williams Millions of people write blogs Micro-blogging is super easy What if tens of millions create micro-blogs?
  23. 23. Diagnostic Test #2 What is valuable? What is nobody else doing? What can I do? What valuable company is nobody building?
  24. 24. First Principles Reasoning: Elon Musk Cost of rocket is huge Cost of fuel is small (.3% of rocket) 100x improvement in cost of space travel if you could reuse the rocket
  25. 25. Diagnostic Test #3 What is your big “secret?”
  26. 26. Recommended Viewing http://www.ted.com/talks/elon_musk_the_mind_behind_tesla_spacex_solarcity.html
  27. 27. Part 3: Exponential outcomes require a fundamental advantage
  28. 28. The Traditional View of Capitalism • Capitalism is a system of perfect competition
  29. 29. The Broader View of Capitalism • “True” capitalism and competition are opposities
  30. 30. “Gerry’s Law” of Capitalism
  31. 31. “Gerry’s Law” of Capitalism “Don’t be the best. Be the only.”
  32. 32. Fundamental Advantages • Perfect competition is not perfect • Can it transcend competition if it works? • At least 10x better in some area • Distribution strategy often flows directly from the advantage
  33. 33. www.marchforinnovation.com #iMarch
  34. 34. THANKS!

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